As New York's cannabis industry continues to evolve, experts foresee a transformative year ahead in 2024. With expectations of a favorable yet unpredictable landscape, the sector is poised for growth. However, challenges such as lawsuits, banking, taxes, and regulatory hurdles persist, making it crucial for businesses to remain nimble and well-capitalized.
In this dynamic environment, industry leaders in New York's cannabis sector offer their unique perspectives and predictions for 2024 across various key areas:
1. Consumption Lounges, Experiences & Hospitality
A significant shift is expected in how consumers engage with cannabis. Consumption lounges and other consumption-friendly formats, such as music festivals and wellness retreats, are on the rise. These spaces aim not only to destigmatize cannabis but also to normalize its consumption. The potential for cannabis hotels, restaurants, tours, spa packages, and cultivation classes is emerging.
Coss Marte, founder of ConBud, one of NYC's newest dispensaries to open in the Lower East Side, emphasizes the importance of consumption flexibility, envisioning a future where businesses create unique consumption concepts catering to diverse consumer preferences.
Happy Munkey’s Ramon Reyes points out the potential of consumption lounges, particularly in addressing challenges faced by those who cannot consume cannabis in their homes due to NYC housing regulations. He sees this as an opportunity for innovative and inclusive approaches in 2024.
Jesse Tolz, VP of Marketing at Union Square Travel Agency, believes that cannabis hospitality, including events, consumption lounges, and dining experiences, will see significant growth in New York.
However, attorney Jeffrey Hoffman raises concerns about potential over-regulation that might hinder the growth of on-site consumption. He suggests leveraging existing nightlife and hospitality infrastructure to streamline the process.
Ryan Lepore, Executive Director of NYC NORML, suggests the need for a shift in mindset, viewing and treating cannabis more like coffee rather than alcohol and tobacco, to better facilitate social consumption.
2. New Product Offerings
While cannabis flower remains a staple, the rise of canna-beverages is expected to take center stage in 2024. Innovative technologies, such as nanotechnology and emulsion techniques, coupled with consumers seeking non-alcoholic alternatives, will drive the growth of canna-beverages.
Jesse Tolz highlights the opportunity for cultivators and producers to market higher quality products in a growing niche, benefiting both consumers and the industry.
3. Increased Enforcement and Regulatory Challenges
As New York's cannabis industry matures, operators will face increased scrutiny in areas such as taxes, compliance, safety protocols, and marketing. Simultaneously, there will be mounting pressure on state and local governments to crack down on illicit operators to protect legal investments and the environment.
Coss Marte believes it's the right time for regulatory changes with regard to cannabis marketing that aligns better with the industry's needs and afford a level playing field with alcohol, prescription medications and even online betting .
4. Cannabis Banking and Taxes
Access to banking and tax deductions remains a significant challenge for cannabis companies. The SAFE Banking Act and changes to IRS Code 280E continue to face hurdles in Congress.
Shahiedah Shabazz, Executive Director of the International Cannabis Bar Association (INCBA), points out the importance of labor and employment issues in 2024, with a focus on labor unions and downsizing in the industry, which directly ties back to banking, taxes and how licensed cannabis companies are required to operate in such an extremely restrictive capacity which is often detrimental to growth and scale.
5. Federal Descheduling/Rescheduling
Federal cannabis reform is an ongoing topic, with various bills introduced in Congress. The U.S. Department of Health and Human Services (HHS) recommended rescheduling marijuana, which could eliminate the burdensome 280E tax regulation for cannabis businesses.
Shahiedah Shabazz expects continued efforts by the federal government but emphasizes the need for greater standardization of cannabis laws among states.
6. Election Implications
Elections have the potential to impact cannabis legislation at both the state and federal levels in 2024, depending on the political landscape.
7. Cannabis Growers Showcases
In 2023, New York's unique Cannabis Growers Showcase program (CGS) has played a crucial role in helping growers amid a dearth of adult-use retailers. However, the OCM has decided to let the CGS expire after January 1, 2024.
Ryan Lepore emphasizes the importance of these showcases in providing consumer access to legal cannabis and the need for the OCM to efficiently manage both showcases and retail store rollouts.
Happy Munkey's Reyes highlights the significance of collaboration between cannabis growers and retailers, envisioning a future where regular events allow farmers to showcase their products directly to both stores and consumers.
Jeffrey Hoffman suggests maintaining a retailer-inclusive requirement for CGS to ensure a level playing field.
Jeremy Cooney, chair of the Senate Cannabis Subcommittee, expresses support for making the showcases a permanent solution, emphasizing the importance of ensuring consumers have access to safe, tested cannabis products.
Although according to a story in NY Cannabis Insider, after speaking with the Office of Cannabis Management this week, NYS Assemblywoman Donna Lupardo (D-Binghamton) has been told that the showcases will be allowed to continue as special events under new rules and regulations.
“My understanding is that the OCM wants to transform the Growers Showcases into something that would require a special event permit,” Lupardo said.
“Even though new stores are opening, there remain cannabis deserts in parts of the state,” she noted. “We are urging the OCM to expedite the rules needed to allow these new permits to be issued soon.”
Aaron Ghitelman, an OCM spokesperson, confirmed in a statement to NY Cannabis Insider, that the agency was working to create a permanent event permit for the events. But the agency did not spell out the details of such a system or when it might be rolled out.
As New York's cannabis industry enters 2024, the consensus among experts is that it will be a year of growth, legal challenges, and innovation. While opportunities abound, businesses must navigate the complex landscape with realism, resilience, and adaptability. With continued unpredictability and changes on the horizon, the industry's future remains dynamic and full of potential, despite the many hurdles the industry has faced to date.